Kemble Coal and Iron Co. v. Scott

• Decision Date: 26 May 1879
• Citation: 90 Pa. 332
• Parties: The Kemble Coal and Iron Co. <I>versus</I> Thomas A. Scott <I>et al.</I>
• Court: Pennsylvania Supreme Court

Page 332

90 Pa. 332

The Kemble Coal and Iron Co. versus Thomas A. Scott et al.

Supreme Court of Pennsylvania.

May 18, 1878.

May 26, 1879.

May 18th 1878.

Before AGNEW, C. J., MERCUR, GORDON, WOODWARD and TRUNKEY, JJ. SHARSWOOD and PAXSON, JJ., absent

Error to the Court of Common Pleas of Bedford county: Of May Term 1878, No. 166.

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John Cessna, for plaintiff in error.—The contract upon which suit was brought was certainly executory, at least on the part of defendants, and we were therefore entitled to show any facts and circumstances at the time of its execution, such as would avoid it or justify a court of equity in granting us relief. The court should, therefore, have admitted the evidence offered: Ley v. Huber, 3 Watts 367; Horbach v. Gray, 8 Watts 492; Case v. Cushman, 3 W. & S. 546; Philadelphia Ins. Co. v. Am. Life & Health Ins. Co., 11 Harris 65; Miles v. Stevens, 3 Barr 21; Boynton v. Hazelboom, 14 Allen 107. This contract was a license, not a lease: Doe v. Wood, 2 B. & Ald. 724; Johnstown Co. v. Cambria Co., 8 Casey 246; Huff v. McCauley, 3 P. F. Smith 206; Funk v. Haldeman, Id. 229; Gloninger v. Franklin Coal Co., 5 Id. 9; Dark v. Johnson, Id. 164. The court erred, as alleged, in the sixth, seventh, eighth and ninth assignments of error. Equity is a part of the law of Pennsylvania, and courts of law enforce equitable principles in actions of debt, assumpsit, covenant and ejectment: Williams v. Bentley, 3 Casey 294; Nicol v. Carr, 11 Id. 381; Piersoll v. Neill, 13 P. F. Smith 420; Graver v. Scott, 30 Id. 88. Execution of a contract will not be decreed where there was a clear mistake of fact. A marketable title was indispensable. A defect in the title of any one of the tracts defeated the right to recover. No royalty was ever paid, nor any demand ever made therefor. From this conduct of the parties it was to be presumed that the contract was ended by mutual consent. The lease was the consummation of the contract. It contained a covenant for title, and its binding force could not be weakened by the letter of Mr. Wattson, and there was no evidence that his knowledge as to the defect in the title to No. 3 was ever communicated to defendants, or that he had authority to assume any risks. The plaintiffs should not have been permitted to recover the price of the ore in these lands unless they showed they were the rightful owners.

Russell & Longenecker and W. H. Koontz, for defendants in error.—The contract was not a mere license, but the grant of a right: Moore v. Miller, 8 Barr 283; Clement & Masser v. Youngman & Walter, 4 Wright 345; Johnston v. Cowan, 9 P. F. Smith 280; Caldwell v. Fulton, 7 Casey 480; Harlan et al. v. The Lehigh Coal and Navigation Co., 11 Id. 289; Funk v. Haldeman, 3 P. F. Smith 243. The defendants were bound to pay for the ore whether mined or not: Fisher v. Milliken, 8 Barr 111; Powell v. Burroughs, 4 P. F. Smith 329; Johnston v. Cowan, 9 Id. 280.

The evidence as to matters antecedent or subsequent to the lease did not constitute such a defence as would relieve the defendants from liability. The assignments of error as to the marketable character of the title are all cured by the finding of the jury that the defendant "took the Mensch tract with knowledge of the title and at their own risk." Under the evidence the jury could not presume that the contract was ended by mutual consent. There was no evidence to show that defendant did not understand the agreement or made any mistake in supposing that the mine could be abandoned, or that the contract was entered into in view of the contemplated railroad. There was no state of facts such as would warrant a chancellor in releasing defendants from their contract.

A re-argument was subsequently ordered, and the case was again heard on May 15th 1879, before SHARSWOOD, C. J., MERCUR, GORDON, TRUNKEY and STERRETT, JJ. WOODWARD and PAXSON, JJ., absent.

John Cessna, for plaintiff in error.—We rely upon our paperbook and argument for 1878. In our fourth point we asked that the case might be taken from the jury because the plaintiffs closed their case without offering any evidence of title. Defendants pleaded want of title in plaintiffs. This was a traverse of their averment of performance and readiness to perform. In such an issue it was essential they should prove title: Negley v. Lindsay, 17 P. F. Smith 217; Heron v. Hoffner, 3 Rawle 400; Smith v. Webster, 2 Watts 478. Instead of compelling the plaintiffs to show title, the court permitted the jury to find that we had agreed to run the risk of title on the evidence contained in the letter of Mr. Wattson. The admission of this evidence and the instruction of the court thereon were manifestly wrong. The letter was not cotemporary with the agreement, but antedated it some time, and was clearly inadmissible to vary the legal effect of a contract under seal.

L. W. Hall, for defendants in error.—The words used in the agreement are "grant, let and lease." These words do not imply anything more than a covenant for quiet enjoyment: Maule v. Ashmead, 8 Harris 482. If there was defect of title in tract No. 3, Wattson, vice-president of the Kemble Coal and Iron Company, and the party who acted for them from the beginning to the end of this whole transaction, had full knowledge of it. This is shown by his letter to Mr. Russell, dated Philadelphia, March 23d 1872, wherein he asks, "whether tracts 3, 4, 6 and 7 Black Valley lands will be leased together, we taking the risk of your establishing title to No. 3." The lease was shortly afterwards drawn by Wattson, including tracts Nos. 3, 4, 6 and 7, "being contiguous tracts on the west side of Black Valley," and it was sent by Wattson to New York for execution. Whatever covenant may have been contained in the words above quoted was only an implied one. Where the lessee has notice of the defect of title, the implied covenant is rebutted.

A motion for a re-argument was again made, but refused.

Chief Justice SHARSWOOD delivered the opinion of the court, May 26th 1879.

The agreement of May 30th 1872, between the parties to this action was not an executory but an executed contract. It was not an agreement that a lease should be made at a future time; but a present lease by the most apt and formal words, "grant, let and lease" for the term of eleven years from the 1st of April 1872, of "the exclusive right to mine, dig and take away the iron ore from four tracts of land in Black Valley, West Providence township, in the county of Bedford," "also the right to make tramroads, erect machinery, open tunnels, deposit dirt, and to do all things necessary and appertaining to the mining of the said ore." In consideration the lessees, the Kemble Coal and Iron Company, bound themselves and their successors to pay to the lessors, their heirs or assigns, on the fifteenth day of each month,...